When Kapston Facilities Management Limited (NSE:KAPSTON) released its most recent earnings update (31 March 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Kapston Facilities Management performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see KAPSTON has performed.

See our latest analysis for Kapston Facilities Management

Commentary On KAPSTON's Past Performance

KAPSTON's trailing twelve-month earnings (from 31 March 2019) of ₹86m has jumped 42% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 29%, indicating the rate at which KAPSTON is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is merely a result of an industry uplift, or if Kapston Facilities Management has experienced some company-specific growth.

In terms of returns from investment, Kapston Facilities Management has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14% exceeds the IN Commercial Services industry of 7.1%, indicating Kapston Facilities Management has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Kapston Facilities Management’s debt level, has declined over the past 3 years from 35% to 30%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 69% to 70% over the past 5 years.

What does this mean?

Kapston Facilities Management's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Kapston Facilities Management to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for KAPSTON’s future growth? Take a look at our free research report of analyst consensus for KAPSTON’s outlook.

2. Financial Health: Are KAPSTON’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.